Green groups sue U.S. government to stop coal plant

By Timothy Gardner

NEW YORK (Reuters) - Green groups said they filed a lawsuit on Monday seeking to stop a U.S. government office from funding the building of a coal-fired power station until it discloses the global warming impacts of the plant.

The Rural Utilities Service, a Great Depression-era program to bring power to rural areas, agreed in May to fund the majority of the $720 million, 250-megawatt Highwood Generating Station near Great Falls, Montana. The office is considering helping to fund billions more for an additional six coal-fired power plants from Wyoming to Kentucky.

The suit was filed with the U.S. District Court for the District of Columbia by environmental law firm Earthjustice, green group the Sierra Club and others. It claims RUS broke federal environmental laws by not disclosing the impacts of the Montana plant and that it did not consider other power generation sources such as wind power before moving ahead with funding for it.

The suit seeks to stop the office, part of the Department of Agriculture, from approving federal loan funds for the plants until it confronts the global warming impacts of coal burning. The loan rates would be about 2 percentage points lower than commercial rates.

U.S. utilities have rushed to push plans for 150 power plants fired by coal amid flat production of natural gas and rising power demand.

But coal emits more of the main greenhouse gas carbon dioxide than any other fuel and environmentalists and the business world alike are pressuring the government to limit output of the gases.

The U.S. Congress is increasingly mulling bills that would set limits on the greenhouse emissions and the Supreme Court ruled this year that federal environmental regulators have the power to regulate carbon dioxide emissions from vehicles.

"You have the Supreme Court and Congress finally recognizing that we need to move now to curb greenhouse gas emissions and yet you have the federal government financing a whole new generation of new coal plants," Abigail Dillen, a lawyer for Earthjustice in Montana, said in an interview.